Draw a rounded rectangle in a similar fashion to this. I used a Corner Radius of .125 in. You can change the radius as you like. More radius makes the corner more rounded, less radius makes the corner sharper.

Change the foreground color to white and draw another rounded rectangle as you see here. You can change the radius for this as well. To make a more glossy look, decrease the radius, to make a duller shine, increase the radius. You can make many different variations of glass buttons using this technique. There are many other techniques as well for creating glass buttons. This is one of them.

Next, change the opacity of the white rectangle you just made to 17 percent. You can adjust the percentage as you would like. The higher the percent the more you give the feeling of a strong light pointing at the button, the less the percent, it gives the appearance of a dull light.

Next, select the Elliptical Marquee Tool.

Using the Elliptical Marquee tool, make a shape similar to this and fill it with a color you desire. Experiment with different colors, to get different effects.

Next, go to [Filter->Blur->Gaussian Blur] and use the settings shown here. You can adjust them as you like.

Next with the blue layer selected press “Command T” or go to [Edit->Free Tranform] and while holding “Alt/Option” drag until the tranform bounding box reaches the edges of the button.

Next, while holding command click on the black rectangle layer. This will select the black rounded rectangle. Then select the blue layer. Once you have done this press “Command + Shift + i” or go to [Select->Inverse]. This will reverse the selection, so it is now selecting the opposite to what was selected before.

Press “Delete” or go to [Edit->Clear].

Your glass button is now complete.

You can also try putting a very transparent image above the black and below the blue. This gives a reflection effect which is really quite innovative.